All Forum Posts by: Kenny Dahill

As of today I've completed my first rental property rehab! The biggest lesson I learned was the need for a partner... A little about me: I'm a DIY real estate type wanting to use BRRR to acquire rentals. I bought my first home and did majority but still has to hire out a good portion. I learned that the labor cost was a large portion of my budget. My next renovation project, my first rental, I did everything except kitchen counters and then the backyard myself. Along the way I was fortunate and had a few friends who wanted to help, the most somebody helped was 4-5 times. I went a month over schedule, and nothing due to construction. I didn't put into my schedule any personal days and ended up missing 30+ out of 90! I learned I needed a partner. I have a guy in mind but I need to know how to structure a partnership. I want to own everything and pay for it all, but feel to get the same commitment of quality and cost that our deal should be performance based. His sole purpose will be to help me with the actual construction. My thought is this: give him the profit from the first X months of rent plus a base. That way he's also focused on lowering the mortgage, which will then help create more profit. I would appreciate any feedback and suggestions, or if you have a similar partnership.

Conceptual:  This house 1200sf house won't have any add-on's or wall knockdowns.  However, the main objective is making the ktichen space feel larger.  The highlights will be installing an island with a long counter top to create a bar.  Dark floors and lighter walls/kitchen will hopefully make it feel brigher and larger inside.  Bedrooms are basic; carpet/fans/wood closet doors.  Rehab: $15K.  Schedule: 6-8 Weeks DIY Purchase: $175K Appraisal Goal: $215K  Refi Goal: $195K  Rent: $1,400-1,500

Demo:  The kitchen is 95% demo'd!  All that remains is the lights and soffit, which will hopefully be removed this weekend.  The floor tile was the EASIEST I've ever done!  Literally took 40 mins for the entire kitchen/dining, I could peel up an entire row across at once, drop it and every tile woudl break apart - with a 90%+ resalvage!  Popcorn ceilings are now all removed.  This week's goal is carpet/pad removal and hopefully start

Color Scheme:  Nothing is final yet, but here is my early design.  White cabinets, gray field paint walls, charcoal island, and blue accent walls.  It is a rental so I'll probably only use blue in the bathrooms.

Cost: 

Here is a current cost report.  Everything is being itemized based on the line item number show on the far left.  I have already saved on certain items (cabinets/microwave) or decided not to proceed with the scope (doors/solid surface counters).  Once I take money away from a scope it'll show in the 'reallocated' column and then drop down to 'Deleted Scope Savings'.  I should note that all my costs are DIY labor, although I should add a line item for 'beer & pizza' since my friends want to help...

Hope you enjoy this update!  I'll keep them coming.

Thank you for all the 'good lucks'!  I will definitely post photos!  For my budget/cost tracking, I am already tracking actual and projections and am glad to share that information.  The good news: I'm already $860 under budget from an amazing Craigslist purchase of cabinets w/ sink/faucet/microwave!  The bad news:  my girlfriend wasn't happy about the last minute addition of an entire kitchen being stored in our pool table room.

The address is 5362 S. El Camino Dr., Tempe AZ 85282.  Purchase: $175K.  Rehab: $15K, 6-8wks.

This property is located in Kiwanis park neighborhood. My primary home is 400y away which is very convenient. I renovated my primary home in 2010 myself and basically did a BRRRR before I ever knew what that strategy was, I moved in and had roommates tho.

Pretty excited.

It's taken almost a year but this Friday I finally close on my first investment property in Tempe, AZ! I'll be using the BRRRR method as I look to take 6-8 weeks to rehab the entire home on my own. I've been gearing up to hit the ground running and simply can't wait! Obviously I have a budget but working in commercial construction and utilizing craigslist I'm hoping to come significantly under budget with hook ups from subcontractors or good deals so I can apply funds to additional scope. Once rehab is complete I'll get out of my current loan and refi the total asset (initial purchase plus all capital invested). I'll have instant equity and will begin my search for a new distressed primary property. Wish me luck and I'll keep you posted on progress.

I apologize if I didn't provide enough on my original post. I did it on my iPhone and the screen was making it tough to write. Anyways...

People who have completed a BRRR, what strategy did you take on the refi?

1) Take a max loan at appraisal value, decreasing CapRate but getting capital back and increasing your cash-on-cash ROI

2). Take a loan for the amount of total invested asset value (purchase + rehab costs). This will increase CapRate and COC ROI but potentially tie up more capital

3). If appraised high enough, take a cash-out loan while essentially having no capital invested. This will decrease CapRate and ROI is obviously unlimited. Either taking out cash as well or enough to pull all capital.

In a BRRR something has to give; capital, CapRate or cash on cash ROI. So which one are you willing to sacrifice and why? I'd love to hear about people who have completed multiple and even tried multiple ways.

My first home I purchased in 2010 as a foreclosure. I renovated and had my roommates move-in with me. A few years later I decided to refi and was able to take a significant amount of equity. My first BRRR without realizing! I have been looking for property for almost a year now for either multifamily or another BRER. I've been struggling but recently I started to ask myself: Am I willing to take less margins if it meant doing a BRRR and creating enough sweat equity to get all my capital back? Anybody with experience?

I have been looking for my first investment property for 9 months now and beginning to reconsider the way I do my offers.  I have submitted probably 8 offers and have had a mixed result.  I've now backed out of two deals within my inspection period either due to shady owner (pretty sure related to drug cartels) or owner wasn't willing to budge on a $12K roof repair.

The last deal was a triplex that had an accepted offer contingent on increased rents and inspection.  All tenants were willing to increase rent as long as I did a better job taking care of the property, i.e. don't let them go 1yr without AC.  The inspection went as expected but when I got a quote for $12K to repair the roof I was forced to back out of the deal knowing the owner wouldn't pay for anything.  So I'm out $600 for the inspection.

This got me thinking... I'm pretty knowledgable in construction and with a few electrical reading tools I could do my own inspections.  Moving forward I am considering being more aggressive about the quantity of offers I send out and seeing which owners bite.  To save time I intend on submitting a lot of offers on properties that are sight unseen, if we get an accepted offer I would do my own first inspection.  If it doesn't meet my expectations I can counter or back-out.  I hate wasting my agents time but I feel this could be a better use of our times while saving me future costs since my title and earnest would be refunded within the inspection period if I cancel.

Does anybody do something similar? 

How do you handle situations like this?

Any tips if I proceed with this method?

Thanks.

Hello,

My name is Kenny and I am from Tempe, Arizona. I am a 29 year old professional who works in construction and has a passion for real estate. Currently I work for a national developer on the construction team as a Senior Project Engineer, my project right now is the largest Class A (office) in our states history. 

My ultimate goal is to combine both real estate and construction in a national corporation. Although this may sound like a big goal I have a vision for its development and growth.  The first step is residential properties that will be used as rentals. I don't want to bore you all but if you're interested message me and I'd love to share. 

How I got interested in real estate: when I was in high school my father took me along to look at several new potential offices for his company. It was that day I learned that real estate companies could own multiple buildings and it wasn't the tenant company themselves. From that moment on I knew I wanted to own real estate.  I'm currently working on getting my real estate license and then next step would be my general contractors license. 

Skip ahead to 2010 when I purchased my first home. At the time I was making less than $40K per year but wanted to take advantage of the recession. I purchased a foreclosure that needed renovations do $123K. I put 5% down and invested approximately $20K in renovations by cashing in my 401K and earning more business through my small side gig working as a consultant with marching bands.  To save money and having always liked construction I decided to do majority of the work myself. I had limited experience but I learned A LOT that summers  

Unfortunately during renovations all my tools were stolen. Since then I've slowly expanded my tool collection by trading work for tools.  Since my home I've continued to sharpen my skills looking for my next project. In August I decided to refi cash out from my equity with the intentions of purchasing new properties. 

Right now I have been looking for potential buy-and-hold rentals. While I do love working with my tools I'm taking the long view of cash flow. Since October 2014 I have been looking for properties. My initial goal was multi-family. I don't want turn key property and if I can find a property undervalued that I could put sweat equity that would be ideal. There have been a few properties I've backed out on my offer because of zoning or repair costs. It has been a long process to purchase my first rental but the search continues!

My top 5 strengths are: Ideation, Strategic, Positivity, WOO, Futuristic

Sorry about the long posts! I've listened to the podcasts for a long time and finally decided to join the community. Thanks for having me!

Kenny